German chems to see much lower growth in second half – group

20 August 2010 16:44  [Source: ICIS news]

TORONTO (ICIS)--The chemical industry in Germany’s Baden-Wurttemberg state will likely see a “significant weakening” in its growth in the second half of 2010, relative to the rate of growth in the first six months of the year, a regional chemical industry trade group said on Friday.

As such, the state’s chemical sales were not expected to regain their pre-crisis levels before the end of the year, said Chemie Baden-Wurttemberg.

The group, an umbrella organisation for four regional chemical and pharmaceutical trade groups, represents 450 companies that employ 96,600 people, according to its website.

Second-half sales growth would slow from first-half year-over-year growth of 5.6%, due to the end of government stimulus measures in Germany and abroad, as well as fiscal budget tightening among EU member states, the group said.

Also weighing on second-half growth prospects were government measures that would effectively increase the industry’s energy taxes, as well as a healthcare reform that could end up dampening consumer sentiment, it said.

As for the first half of 2010, Baden-Wurttemberg’s chemical and pharmaceuticals industry had recovered from 2009, when sales fell almost 10% from 2008.

However, with 5.6% year-over-year sales growth, the industry lagged well behind the 16% sales growth in Germany’s overall chemicals industry in the first six months.

The state's relatively weaker performance was due to a 3.5% decline in pharmaceuticals sales, especially export sales, the group said but it did not explain why pharmaceutical sales fell.

On the other hand, the state’s coatings and paints producers recorded first-half year-over year sales growth of 11.1%, driven by improved demand from the construction and automotive industries. Baden-Wurttemberg is the home state of luxury carmakers Mercedes and Porsche.

Germany's chemical industry trade group VCI said earlier it expected full-year 2010 chemical production to increase by 8.5%, much lower than the 13.0% year-over-year growth in the first six months of 2010. Last year, Germany's chemical production fell 10% from 2008.

In related industry news on Friday, a number of German industry leaders, including BASF chief executive Jurgen Hambrecht, signed an open letter opposing Chancellor Angela Merkel’s plans to tax nuclear power providers.

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By: Stefan Baumgarten
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